LAW OF CONTRACT:

OFFER

What to do when
someone gives you a
good deal.

BY THE END OF THIS CLASS

Youll understand the different elements of a contract
Youll understand what the idea of an Offer actually is.
Youll be able to highlight when something is an Offer or an
Invitation to treat
Youll understand that an advertisement is NOT a contract.

LETS GET STARTED

Carlill v Carbolic Smoke
Ball Co. Ltd(1893)

WHAT IS A CONTRACT?
Its easy to think of an agreement and a contract as the same
thing.
Contracts are enforceable, not every agreement will be recognized
in a court of law.
A contract is an agreement enforceable by law. In other words, a
contract is an agreement which is legally binding between the
parties.
Contracts in Malaysia are bounded by the Contracts Act 1950.

ELEMENTS OF A CONTRACT
Offer
Acceptance of the offer
Intention to create legal relations
Consideration
Certainty
Capacity

OFFER
Section 2(a) of the Contracts Act 1950.
When one person signifies to another his willingness to do or to
abstain from doing anything, with a view of obtaining the assent of
that other to the act or abstinence, he is said to make a proposal
Section 2(c) Calls the person make the proposal, the Promisor.
They are sometimes known as the offeror

OFFER
A proposal or an offer is something which is capable of being
converted into a contract by its acceptance.
A proposal must be a definite promise to be bound provided certain
specified terms are accepted.
The promisor mustve declared his readiness to undertake an
obligation upon certain terms, leaving the option of its acceptance
or refusal to the Promisee
Affin Credit(Malaysia) SDN BHD v Yap Yuen Fui(1984)

EXPRESS AND IMPLIED

OFFER
Section 9 of Contracts Act 1950
A proposal made with words (oral or written) is said to be
expressed.
A proposal that is made other than in word, I.e by conduct, it is said
to be implied.

RULES PERTAINING TO AN
OFFER
The offer must be communicated to the offeree; a person other
than the offeree cannot accept the offer
The offer and acceptance must correspond
The offer must be distinguished from an option
The offer may be revoked at will before acceptance
The offer must bee distinguished from preliminary negotiations
The offer must be distinguished from an invitation to treat

OFFER MUST BE
COMMUNICATED
Unless the offer is brought to the notice of the offeree, there cannot
be acceptance of the offer.
It is possible for an offer to be made to the world at large- Carlill
illustrates this

OFFER AND ACCEPTANCE

MUST CORRESPOND
The promisee accepts the offer on the SAME terms as stated in the
offer.
Raffles v Wichelhaus(1864)
Ayer Hitam Tin Dredging Malaysia Bhd v YC Chin Enterprises
Sdn Bhd

DISTINGUISHING AN OFFER
FROM AN OPTION
Option- Merely an undertaking to keep the offer open for a period of
time.
However, it is unenforceable unless it is supported by the
promisees consideration.
Goldsborough Mort &Co Ltd v Quinn(1910)
Coelho v The Public Services Commission(1964)
M N Guha Majmuder v R E Donough(1974)

OFFER MAY BE REVOKED

BEFORE ACCEPTANCE
The offer confers on the power to the offeree to convert any offer
into a contract by acceptance.
However, an offer may be revoked BEFORE the offeree accepts it.
Routledge v Grant(1828)

OFFER FROM AN INVITATION

TO TREAT
Pharmaceutical Society of Great Britain v Boots Cash
Chemist Ltd(1953)
It was held that the display, even with prices marked, was only an
invitation to treat.
A contract would only be made at the cashiers desk
Can you think of another case law that is similar to this one?
Partridge v Crittenden(1968)

WHAT ARE SOME INSTANCES

OF ITT?
Auctions
Advertisement of Tenders
Catalogues
Price Lists
Goods Displayed in Shop windows and shelves.

ADVERTISEMENTS
Advertisements can sometimes be an offer or an invitation to treat
An invitation to treat is an invitation for offers.
What distinguishes the two is the Intention.
Take for examples Auctions.

HOW DOES AN OFFER END?

Acceptance
Rejection
Counter-offer- Hyde v Wrench
Revocation
Lapse of Time

REVOCATION AND LAPSE OF

TIME
Section 5(1) of the Contracts act states
A proposal may be revoked at any time before the communication
of its acceptance is complete as against the proposer, but not
afterwards
Section 6 deals with revocation
By communication
By lapse of time
By failiure of the acceptor to fulfil a condition precedent to acceptance
By death or mental disorder that comes to the knowledge of the acceptor before
acceptance